THE main Opposition, A Partnership for National Unity (APNU), has condemned the recent move by the Government, through the Ministry of Finance, to increase taxation on gasoline and diesel. 

According to APNU, they view Cabinet’s approval of the tax increase on gasoline from 20 to 40 per cent and the hike on diesel from 15 to 35 per cent as “unwise and uncalled for.”
“APNU notes that despite dramatic reductions in the price per barrel (of fuel) on the world market, the people of Guyana, (especially in the mining, manufacturing, agricultural and transportation sectors), will not get any relief,” the Party said.
Furthermore, APNU said that this taxation by the Government will have a direct negative effect, increasing the cost of production in gold mining, manufacturing and other sectors that are heavily dependent on gasoline and diesel.
To this extent, APNU condemns this action, especially in light of the PPP/C Administration’s prorogation of the Parliament of Guyana, shutting out the people’s voice.

NORMAL PRACTICE
In a press statement, the Ministry of Finance said that it continues to apply a concessional tax rate on fuel and the movements of oil prices on the world market will not affect current prices.
Oil prices have dropped on the world market, triggering the expectation that gas and diesel prices will also decrease.
However, the normal practice as noted by the media over the last four years, is that Government’s policy is to ensure that the consumer does not feel the pressure of any fluctuation in oil prices.
In other words, for example, consumers paying $980 per gallon at the pumps will pay that same price when oil prices go up because Government lowers the excise tax. On the other hand, when oil prices go down, Government increases the excise tax and consumers will continue to pay the same amount.
This way the commodity market, relative to gasoline and diesel, remains constant in the interest of the Guyanese people – a welcomed move in many sections of the private sector given that increases and decreases in oil prices fluctuate invariably every quarter, every year.
According to the Ministry, the tax rates that are being applied continue to be highly concessional relative to the standard rate of 50 per cent and when the world market price for gasoline and diesel increases, the excise taxes are expected to once again be reduced.
“The Government has in place a long-standing and well-functioning mechanism under which the ad valorem tax rate on fuel products is adjusted downwards when the world market price for fuel moves upwards, and vice versa it adjusts upwards when the world market price for fuel moves downwards,” the Ministry said.

ENSURING STABILITY
The Ministry of Finance contends that this mechanism is in place to ensure that consumers are cushioned from spikes in the world market price, and has functioned effectively in protecting the Guyanese consumer from exorbitant price fluctuations when the world market price reflects high volatility.
The Ministry said, “Accordingly, the price consumers pay at the pump for gasoline and diesel has remained stable over recent years because this administration has made appropriate interventions by adjusting the excise tax rate.
“The ability of the Government of Guyana to stabilise the cost of diesel and gasoline has also ensured that the cost of production of goods and services that require fuel inputs does not adversely affect consumers.”
The Ministry is expected to continue to monitor the acquisition cost of refined fuel products and would make the appropriate interventions by adjusting the excise tax rates in order to minimise any adverse consequence on the economy from fluctuations of oil prices on the world market.